He’s filing for Arbitration, Right?

The Salary arbitration process in the NHL is quite complex, but a necessity for both general managers and restricted free agent players during the offseason. This process is critical in settling contract disputes in a professional, business-like manner. This off-season is consistent with others in that many players filed for an arbitration hearing yesterday in attempt to alleviate the conflict that exists between agent and general manager. In this article I will try to explain the arbitration process in a digestible manner.

Basically, the team (represented by the respective general manager) and restricted free agent each propose a salary for the upcoming season during a hearing. These monetary proposals are based on what each respective side believes the player is ultimately worth to the franchise (based primarily on statistics and ability, but can also include how many fans such a player can single-handedly bring to the arena to draw revenue). For example, a player like Sidney Crosby would have a strong argument for a hefty salary proposal based on his great offensive output (evidenced by his statistics), the fact that he led his team to a Stanley Cup as the Captain (showing strong character qualities), and the undisputed understanding that he puts fannies in seats in Pittsburgh. You add all these elements together and your result will ultimately lead to a heavy arbitration award (a large pay-day in the upcoming seasons contract). But we are getting a little too far ahead of ourselves.

Sidney Crosby represents a very easy example, and is also a player that will most likely never have an arbitration hearing because he is an elite talent who will likely always receive his contract demands. Players with middle of the pact talent usually are more prone to enter the arbitration process because it is their only bargaining chip as a free agent. A player usually enters the arbitration process in their early to mid 20’s. Their cases are a lot more convoluted than say a ‘Sidney Crosby’ because general managers are looking to avoid over-payment of less than stellar talent. In this case the player files for arbitration and each side argues for their proposal in front of the arbitrator, a neutral third-party, who must take the arguments and make a decision as to what he will set the player’s salary to.

The requirement for arbitration eligibility is at least four years in the league (unless a player signed their first NHL contract after the age of 20 then the terms are slightly reduced). The deadline for a player to file for salary arbitration is July 5th with cases heard in late July/early August. A team and player are allowed to negotiate at all times leading up to the arbitration hearing to try and reach an agreement without the arbitrator.

Further a team can also bring a player to salary arbitration to try and solve a contract dispute. A player can only be taken through the arbitration process once in his career, and can not be awarded less than 85% of his prior contract salary. A player can bring his team through the salary arbitration as many times as he wants throughout his career, and there is no such restriction on salary awards when a player takes his team through the process.

After the hearing, a arbitration award decision must be made within 48 hours of the hearing. The abitrator can award the player with either proposal, or make his own decision on what the player deserves (usually a figure somewhere between the two proposals).At this point a team can accept the arbitrators decision and sign the player to those exact terms or decline the award and “walk away.” If the team declines the award, the player has the right to declare himself an unrestricted free agent and negotiate with any team._x_

Here is a list of all the players that filed for arbitration for this off season.